The Manufacturers Association of Nigeria (MAN) has hinted that international companies currently domiciled in Nigeria may relocate from the country, if the hike in tariff by power distributors is implemented on July 1, 2023.
The MAN expressed concerns that some manufacturing companies had already moved from Nigeria, due largely to instability of power supply, and fluctuating exchange rate, which it said, was lately unified.
The President of MAN, Francis Meshioye, disclosed to newsmen that members of the association expended over N144 billion on alternative energy source, which he said, negatively impacted their operations.
Meshioye therefore called on the government to re-examine its decision regarding the planned tariff hike, saying many companies would move from the country in droves if it is implemented.
“The downsizing of businesses in Nigeria, for instance, shows that many businesses are not doing very well. So, this power issue and other things, have made some manufacturers, particularly international businessmen, to relocate from Nigeria.
“Now, if you spent N144 billion on alternative energy sources in one year, you can only imagine the impact which that will have on your cost operations. The manufacturing business in Nigeria is affected by so many factors, energy is a major one.
“Manufacturers provide almost every infrastructure by themselves. Outside the major roads, you find out manufacturers provide water, power, security, etc. So, when you look at it, you find out that the cost of doing business is so huge, that a businessman will ask , is this the only place I can do my business? Can I move my capital elsewhere?” Meshioye said.
He therefore advised government to look at the power issue, saying increase in tariffs would not augur well for manufacturers.
“Therefore anything to reduce energy costs will be beneficial to manufacturers and the masses in general,” Meshioye said.
It will be recalled that MAN had, in a recent statement, disclosed that data from its survey indicated that manufacturers expended at least N144.5 billion on alternative energy source in 2022 as against N77.22 billion in 2021.